Telstra has confirmed that around 1400 employees are set to lose their jobs.
The telco today briefed its staff on the cuts.
In November, the telco revealed that it was planning to find more than $1 billion in savings to offset the impact of the National Broadband Network on its business.
“Today, we’re providing a target of more than $1 billion net reduction in our underlying core fixed costs by FY 21,” chief financial officer Warwick Bray said.
“Because this productivity target is net, it goes directly to offsetting the NBN impact.” The productivity target equated “to a more than two per cent annual reduction in our underlying core fixed costs,” the CFO said.
Telstra has said it expects the NBN to have an ongoing negative impact on EBITDA of $2 to $3 billion annually once migration to the new network is complete.
In a note sent to employees today, Telstra CEO Andrew Penn said that company needed to “transform, urgently”. Telstra faces significant challenges in the face of digital disruption and increased competitive pressures, as well as the impact of the NBN.
“This means we will need to become a leaner organisation, one built on digitised systems and services for customers and employees, and one where we will continue to rely on partners for scale,” the CEO said.
The company is undertaking a restructure across its Operations, Retail, Global Enterprise and Services, and Media & Marketing groups, the CEO wrote.
The changes will see up to 1400 roles cut over the next six months. Roles will be cut from most part of the business and affect staff in all states and territories and all levels of seniority and also affect some overseas roles.
“As a company, we are facing rapidly changing customer expectations, intensified market pressures and increasing competition, disruptive technology changes and shifting industry economics,” Penn wrote.
“This includes things that we have talked about previously – the $2-3 billion EBITDA gap due to the rollout of the nbn; margins on resale of the nbn likely to be lower than today; and meeting our customers’ increasing expectations of us.”
A new organisational structure will be rolled out across Operations “to provide end-to-end responsibility and reduce complexity in four key lines of business – Networks, nbn & Commercial Delivery, IT and Digital Solutions, and Customer Service Management. “
Telstra Retail will be renamed Telstra Consumer & Small Business and evolve “to bring together like capabilities from across the group to create three core divisions – Customer Experience & Transformation, Telstra Products, and Consumer & Small Business Sales & Service”.
In Global Enterprise and Services, sales and services will be rolled into one team and the business renamed Telstra Enterprise.
Telstra Business will be eliminated, with functions shifted either into Consumer & Small Business or Enterprise.
Telstra’s Media & Marketing will also see changes to “focus more on the customer and be more agile in how we work we are streamlining how we go to market, including bringing together our domestic and international marketing teams for Enterprise and continuing to make changes in our Media Team to better deliver our media strategy, which is growing in importance to Telstra”.